BA builds e-bookings impetus
Price hikes to shared distribution system aim to boost BA web sales
British Airways (BA) may raise its fees for flights bought via the travel industry’s common booking engine to increase the number of passengers booking directly via the airline’s web site.
BA is threatening to pass on booking fees and withhold content, such as seat availability, from the global distribution systems (GDS) shared by all airlines.
GDS display worldwide flights and fares of up to 300 airlines for travel agents and other buyers. BA is renegotiating with its GDS providers and could increase fees by as much as 300 per cent per flight, from 50p to £2, when its contract expires at the end of this month.
‘We are under pressure to cut costs and to increase passengers who book direct from the airline from 35 per cent to 50 per cent,’ said a BA spokesman.
BA’s decision could have a significant impact on the e-commerce strategies of other airlines, many of which also have a growing interest in online services.
Direct web sales represent a shift for the whole airline industry, says Gartner senior vice president Mark Raskino.
‘There are more benefits to airlines in booking direct than simply not paying the fee to use GDS,’ said Raskino.
‘It allows airlines to develop their relationship with frequent flyers and encourage them to use other electronic customer service processes.
‘Once they get passengers into the habit of purchasing online, they can encourage the use of technologies like remote check-in or print-at-home, which also reduces costs,’ he said.
BA rival Virgin Atlantic also encourages passengers to book online, but a spokeswoman confirmed the airline will continue to provide content to GDS.
But BA fee increases are likely to be copied by other airlines, says Martin Atherton analyst at Freeform Dynamics.
‘Over the past decade, Airlines have been trying to create loyalty programmes and the natural hub for this information is their own web sites,’ said Atherton.
‘It is about having more control over the booking process to cross-sell to passengers more effectively,’ he said.
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